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2 Organization BehaviorA field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organization effectivenessStephen P. Robbins & Timothy A. Judge

5 1. Work SpecializationDescribes the degree to which tasks in an organization are divided into separate jobs. The main idea of this organizational design is that an entire job is not done by one individual. It is broken down into steps, and a different person completes each step. Individual employees specialize in doing part of an activity rather than the entire activity.

6 2. DepartmentalizationThe basis by which jobs in an organization are grouped together. For instance every organization has its own specific way of classifying and grouping work activities.

8 Functional DepartmentalizationPlant ManagerManagerengineeringManager AccountingManager manufacturingManager HRPositiveNegativeEfficiencies from putting together similar specialties and people with common skills, knowledge and orientationsPoor communication across functional areascoordination within functional areaLimited view of organizational goalsIn- depth specialization

9 Product DepartmentalizationProcter & GambleTidePampersCharminPringlesPositiveNegativeAllows specialization in particular products and servicesDuplication of functionManagers can become experts in their industryLimited view of organizational goalsCloser to customers

11 Process DepartmentalizationState motor vehicle officeMotor vehicles divisionLicensing departmentTreasury departmentPositiveNegativeMore efficient flow of work activitiescan only be used with certain types of products

12 Customer DepartmentalizationDirector of salesManager consumers accountManager large corporation accountManager software developers accountManager small business accountPositiveNegativeCustomers need and problems can be met by specialistsDuplication of functionsLimited view of organizational goals

13 3. Chain of CommandUnbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom2 important concept:Authority: Refers to the rights inherent in a managerial position to tell people what to do and to expect them to do itUnity of Command: The management principle that each person should report to only one manager

14 4. Span of ControlThe number of subordinates a manager can efficiently and effectively direct

15 5. Centralization and DecentralizationCentralization: the degree to which decision making is concentrated at a single point in an organizationDecentralization: decision making is pushed down to the managers closest to the action

16 The degree to which jobs within an organization are standardized6. FormalizationThe degree to which jobs within an organization are standardized

18 Simple StructureLow degree of departmentalization, Wide span of control, High authority, and Low formalization.The company usually small and “young”Used by big company in crisis, for example IBM in 1993

20 Simple Structure Positive Negative The structure is simpleLimitless decision makingFlexible, fast andInsufficient if the company expandsLow cost in implementationHigh risk in implementation

21 Bureaucracy StructureSpecialization on routine operational taskFormalized regulation, centralized authority, narrow span of control and decision making follow the chain of commandApplied on big and mature organization with active routine and high standarization, for example U.S Department of Education

23 Bureaucracy StructurePositiveNegativeCarry out standarized task efficientlyCan create conflict between sub-unitDoesn’t require many employee trainingOverly concern on rule, hence there is no initiative from the employeesIncreasse communication in the organizationFocus on sub-unit’s objective

24 Matrix StructureA combined structure of functional departmentalization and product departmentalizationTwo chain of command, so each employee has two superiorUsed by company that require fast response in changing environment, fast information processing, and dealing with financial and human resource constrain, for example : Bussiness Administration school

26 Matrix Structure Positive NegativeSimplifying the activity coordination in the companyConfusion in handing the report to either superiorEasy to communicate between employeesCompetition between managersEmployee with specific skill are spread in the organization

27 Team StructureUsing teams as main force in coordinating each job activitiesDesentralized decision making until team levelRequire the employee to work in specialization and generalizationFor Example; Food Market Inc.

28 Virtual OrganizationImplenting Outsourcing for main functions and sentralization of the organizationFocusing on organization specializationFor Example: Apex Digital

30 Virtual Organization Positive Negative Flexible in the implementationLack of control in the organization’s sub-units

31 Boundaryless OrganizationChain of command is erased, has unlimited span of control, and changing department with empowered teamThere are cross-hierarchy team, participative decision making, and 360 degree work valuationEmployees are driven to generalisazing rather than specialisazingOrganization remove the boundaries with external partyFor Example : Oticon A/S

32 MCS & Organizational StructureAn effective execution of MCS is possible only when there is an efficient HR management, excellent work culture as well as an efficient organization culture -Subhash Chandra Das-Organization structure is a principal component in MCS’s structure. Organizational structure is a tool to distribute authority needed in using organization’s resource to achieve organization’s objective. –Mulyadi-

33 Why do Structure Differ?Mechanistic Model : A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralizationOrganic Model: A structure that is flat, uses cross- hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participate decision makingMajor causes or determinants of an organization’s structure:StrategyInnovationCost MinimizationImitationOrganization sizeTechnologyEnvironment